TMI Blog2016 (5) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Officers on the matters pertaining to the assessments. The law is well settled that tax authorities entrusted with the power to make assessment of tax discharge quasi judicial functions and they are bound to observe principles of natural justice in reaching their conclusions, taxing authorities exercise quasi-judicial powers and in doing so they must act in a fair and not a partisan manner. Although it is part of their duty to ensure that no tax, which is legitimately due from the assessee should remain unrecovered, they must also at the same time not act in a manner as might indicate that scales are weighted against the assessee. It is impossible to subscribe to the view that unless those authorities exercise the power in a manner most beneficial to the revenue and consequently most adverse to the assessee, they should be deemed to have exercised it in a proper and judicious manner. In view of above, we are not inclined to interfere in the order of the ld. CIT(A) in allowing the claim - Decided against revenue MAT applicability - Re-computing the profit under section 115JB - Held that:- The assessee is liable to pay the tax under MAT in spite of the fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80IB(10) of the Act for an amount of ₹ 3,95,94,294/-. However, the AO disallowed the deduction claimed by the assessee under section 80IB(10) of the Act as the assessee failed to fulfill the condition under section 80AC of the Act for filing the income tax return before the due date as specified under section 139(1) of the Act. In the instant case, the assessee filed the ITR on dated 04.02.2009 for the assessment year 2008-09 which is after the due date as specified under section 139(1) of the Act. 3. Aggrieved, assessee preferred an appeal before Ld. CIT(A). Before Ld. CIT(A) assessee submitted that assessee was following percentage completion method for the accounting of its real estate project activity in terms of Accounting Standard 7 (AS-7) till 31-3-2007. However the assessee at his own found that the AS-7 is applied to the entities engaged in the construction activity and its activities are of developing of projects. So the assessee changed its accounting policy and started following the AS-9 i.e. Revenue Recognition w.e.f. financial year 2007-08 prospectively. The assessee further submitted that the deduction of profit claimed by the assessee for the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered as notional profit or book profit subject to tax u/s 115JB of the income Tax Act 1961 in the assessment year 2008-09 2. Profit declared in the assessment year 2008-09 on presumptive sale of flats is brought to tax in the assessment year 2011-12 in which the development or consideration of the project is completed or alternatively spread out over the years period from AYs 2005-06 to 2007-08 proportionately during which construction work was carried out by the value of work done. 3. Corresponding deduction u/s 80-IB of the profit be considered in the am year 2011-12 or alternatively in AYs 2005-06, 2006-07 2007-08 when the profit is liable to be assessed as income. Considering the above submissions of Ld. CIT(A) deleted the addition made by the AO by observing as under:- After going through the facts of the case and citation I am convinced that the income of ₹ 3,95,88,640/- reported in the profit loss account as well as in the income tax return of the assessment year 2008-09 cannot be brought to tax in that assessment year. At the same time, I do not agree with the Appellant to postpone the reported profit to assessment year 2011-12 i.e. the year in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO in AYs 2005-06, 2006-07 2007-08 as per law. The Appellant, however, will be liable to pay tax u/s. 115JB on the declared income of ₹ 3,95,88,640/- in the assessment year 2008-09. Being aggrieved by this order of Ld. CIT(A) Revenue came in appeal before us. Shri Sital Prasad Roy, Ld. Departmental Representative appearing on behalf of Revenue and Shri Sanjay Bhattacharya, Ld. Authorized Representative appearing on behalf of assessee. 4. The ld. DR relied on the order of AO whereas ld AR relied on the order of ld. CIT(A). We have heard rival contentions and perused the material available on record. The ld. AR has filed a paper book which is running from page 1 to 55. From the aforesaid discussion we understand that the assessee declared the notional profit following the percentage completed construction method. The commencement of the construction for the impugn project began from the financial year 2004-05 and completed in the financial year 2006-07. From the facts of the case, we find that the assessee has incurred the entire cost on the construction for the impugn project in the financial year 2006-07 but failed to declare the profit in that year in consonanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice to show cause, the authority can decide according to his whim and fancy. The judicial process does not end by making know to the person the proposal against him and giving him a chance to explain. It extends further to a judicial consideration of his representations and the materials and a fair determination of the question involved in the case of M.Appukutty v. STO (1966) 17 STC 380 (Ker). In the case of CBDT v. Smt. Kamala Bai Srikrishna Soni (2010) 323 ITR 664 (Kar) it was held that where the assessee had filed a belated wealth tax return including assets which were not chargeable to tax and could not file a revised return because it was either time-barred or was not permissible in the view that a belated return could not be revised, if the assessment has been taken for scrutiny, the AO is bound to pass an order so that assessee s claim was bound to be considered one way or the other with the right of appeal, if the order is adverse. The decision of the Hon'ble High Court was the subject-matter for special leave, which was declined by the Hon'ble Supreme Court in the case of CBDT v. Kamala Bai Srikrishna Soni (2010) 322 ITR (St) 16. Further, in the case of CIT v. Sim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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